Saturday, August 14, 2010

Krugman Winks and Laughs at US "Analysts"

Social Security outlays are projected to rise from 4.8 percent of GDP now to 6 percent of GDP in 20303. This is a huge crisis, requiring complete overhaul of the system.

Defense spending rose from 3 percent of GDP in 2001 to 4.2 percent last year; you should also add a couple of tenths of a percentage point for non-defense security spending. This was no big deal — certainly not a reason to reconsider the tax cuts sold back in 2001 as easily affordable given large projected budget surpluses.